Monthly Archives: April 2017

How Microlending is Useful for Starting Businesses

There is a lot of buzz going around the term “microlending.” It is not clear what micro financing is and who should exactly benefit from this program?

In simple terms, microlending is a form of funding that lends small amounts of cash to poor hatchling entrepreneurs to promote self-reliance and end poverty. The money entrepreneurs receive through a micro funding program forms the start-up capital for their businesses. As time passes however, merchants are expected to grow and pay back the micro loans. However, the primary objective of the loan is to boost the retailer’s income as well as that of the staff they hire.

The idea of lending finances to small businesses has been in use for thousands of years, but the most recent micro financing dates back to 1983 in the Grameen Bank in Bangladesh. Muhammad Yunus, the founder of the bank, used his money to lend small loans to poor entrepreneurs in a small town called Jobra at low-interest rates. The concept quickly spread worldwide and is now adopted by many of institutions all through the world. In 2006, Muhammad Yunus was awarded the Nobel Peace Prize for his great work with assisting the less fortunate through micro lending.

Nowadays, microlending has grown into a lucrative business for most profit and non-profit companies who offer micro-financing to businesses worldwide, as well as recently the United States. Some micro-financing companies like Kiva, use loans from private persons. Kiva allows anyone to loan funds in increments of $25 to merchants from their database.  For individual lenders, this provider is proving beneficial due to their rates of repayment; however, individual lenders must realize that they risk not getting paid back. Most Kiva lenders see micro financing as a generous act and don’t care to be repaid.

Although it seems like lenders prefer loaning cash to women, plenty of men still benefit from microloans courtesy of service providers like FAM. Women are well placed to set up smaller businesses and also, they look more trustworthy than men, in the eyes of the lenders, regarding loan repayments. For both male and females, it is wise to consider microloan opportunities you are eligible to if you can prove you have a great business suggestion and can pay back the loan once your business picks up.

How Microlending Works

Initially, microlending was created as a savory option to lenders who were notorious for exploiting borrowers. Small loans are offered at affordable fees to allow borrowers gain easy access. The universal average interest and fee rate is predictable at 37%, with rates shooting in some areas as high as 70%. This high-interest rate is caused by the high transaction cost of traditional micro financing processes relative to the amount of cash the lenders offer.

Most folks may argue that the high fees that come with micro-funding overpower its purpose as a tool for fighting poverty. The indisputable reality is that borrowers must make enough money to sort the principal plus the interests on the loan to ensure that borrowing the loan doesn’t make them poorer than they were earlier.


What Research About Experts Can Teach You

What Accounting Services You Can Get?

Running a business is not always an easy matter. When it comes to managing, it becomes tedious and daunting when you need to get your budget and finances right. There are lots of things to be done like being forced to start early and end late, which is pretty common for business owners. It’s for this reason that business persons deserve to hire assistants in different aspects of the business. One professional that can be hired which can help in managing finances and make sure that everything’s in order and smoothly running are accountants.

You can consider hiring the hire the services only when you need it most or maybe, hire a company accountant. In reality, accountants are offering various kinds of accounting services and therefore, you have to be extra careful when hiring these kinds of services. This way, you can be sure that you are getting professional service that can meet your expectations.

As you read the next lines, you are going to learn about top services that professional accountants provide for your business.

Number 1. Bookkeeping services – truth is, this is one of the basic functions that any accountants do and this compose of tasks including preparing financial statements, keeping journals and sales ledgers, recording financial transactions and the likes. Bookkeeping is extremely important for businesses because this helps them in their day to day business operation which ensures that finances are checked.

Number 2. Payroll preparation – indeed, your employees play the most important role in your business and for that, it is only right that you give them what they deserve. Accountants may help you in terms of recording deductions, taxes and wages which take off the burden off your shoulders. Aside from that, your accountants will also do preparation of financial statements, helping with taxes payroll while dealing with queries on the same.

Number 3. VAT filling – VAT whether you like it or not can be complicated especially when trying to determine what needs to be paid. Accounting services are making it easy for your business as accountants will be in the position to fill and file VAT returns, solve and negotiate tax issues and even deal with relevant bodies. You’ll enjoy VAT advice as well from your accountant allowing you to make only the right and best decisions for your business.

Number 4. Tax advice – one thing that has made tax tricky is that, legislation changes continuously and with this in mind, it is inevitable to face new tax regulations every now and then. Professional accountants are updated with recent changes and because of this, it ensures that your business will stay compliant with regulations in order to steer clear of penalties and several other types of fees.